As global economic conditions remain fragile with daily increases in new COVID-19 cases in many parts of the world – where the spread of the virus had previously been partly brought under control – the magnitude of this year’s economic contraction for the Fijian economy is expected to be smaller than initially anticipated.
And Fiji’s central bank has also noted that next year’s projected recovery largely hinges on the opening of international borders and the resumption of travel.
In its economic review for the month ending November 2020 released this evening, the Reserve Bank of Fiji reports that the local economy is envisaged to contract by 19.0 per cent in 2020.
This, compared to the earlier estimate of -21.7 per cent, stemming from higher-than-expected growth in the agriculture sector, coupled with lower-than-anticipated declines in the wholesale and retail trade, and restaurant and hotels; and manufacturing and construction sectors.
“In 2021, economic growth is expected to range between 1.6 per cent and 8.0 per cent given the substantial uncertainties around the reopening of borders for quarantine-free travel and appetite for tourism activity,” the RBF stated.
It stated that sectoral performances continued to be well below 2019 levels in the first 10 months of the year.
Cumulative to October, it noted that visitor arrivals declined by 80.7 per cent, a consequence it attributed to the prolonged closure of international borders.
It further noted that electricity generation fell (-10.4 per cent), together with cement (-14.1 per cent) and gold (-10.5 per cent) production.
The output from the timber industry showed mixed results as pinewood supply (22.8 per cent) and woodchip output (45.7 per cent) increased, while sawn timber (-11.4 per cent) and mahogany (-22.5 per cent) production fell.
The central bank also noted that cane quality issues continued to affect sugar production, which fell by 3.0 per cent, while cane harvested rose by 4.5 per cent as of November 23, 2020.
